Tungsten Metals Group Ltd plans to list on the ASX in late September 2024, raising $12 million to $14 million to give it a market cap of $36 million to $38 million at IPO.
The company plans to list under the ticker TME and has a potential price-earnings ratio (P/E) of 1 at full production. In 2023, TME was awarded a A$1.2 million Critical Minerals grant in the Australian Federal Budget.
Interested investors can visit the company’s website or attend an IPO webinar set for 12pm WST, 2pm AEST today. You can register here: https://bit.ly/4fMVtvW
Cornering ferrotungsten market
Tungsten Metals owns and operates the largest and most advanced ferrotungsten (FeW) production facility outside of China, at a time of urgent need for reliable sources of this strategically important metal for defence, transportation, and infrastructure projects.
Production capacity exceeds that of the rest of the world combined, excluding China and Russia. This makes TME the only large-scale option for Western companies looking to keep their tungsten concentrate sales and FeW purchases outside the Chinese and Russian systems.
TME’s well-established FeW processing facility in Vietnam spans more than 21,000 square metres and includes a furnace liner containing over 140 tonnes of FeW. Management estimates the cost to build a similar plant today would exceed A$30 million.
The company has secured orders for its FeW from manufacturers across various sectors, including defence, mining, construction, energy, transport and infrastructure. It sources tungsten concentrate from mining companies, recycled materials and commodity traders, which is then processed into FeW at its Vietnam facility.
TME’s business model is straightforward, focusing solely on processing. The company does not engage in mining activities and has minimal exposure to commodity price fluctuations.
As TME enters the market revenue-ready with a "process at a margin" model—where it purchases tungsten to process into FeW for sale to global clients—the company is well-positioned to generate substantial free cash flow for its shareholders.
What is ferrotungsten?
Ferrotungsten is a ferroalloy composed mainly of iron and tungsten, produced by smelting tungsten ores with iron elements in an electric arc furnace. It is primarily used as an additive in steel production, enhancing the hardness and strength of steel, particularly at high temperatures.
Additionally, ferrotungsten is used in the production of other alloys and various industrial applications. The alloy is globally important due to the critical role tungsten plays in the economies of several countries, including the USA, UK, EU, Japan, Korea, Russia, and Australia.